Digest Content
- Good progress in the formal negotiations for an investment facilitation agreement
- Least developed countries hit hard by trade downturn triggered by COVID-19 pandemic
- DDG Wolff calls for new initiatives to cut tariffs on medical supplies and equipment
- Thailand joins negotiations on services domestic regulation
- International Investment Agreements Reform Accelerator
Good progress in the formal negotiations for an investment facilitation agreement[1]
Over the two-day meeting 9-10 of November, participating delegations — currently 106 — engaged in a very constructive discussion, with a view to achieving a concrete outcome by the 12th WTO Ministerial Conference (MC12) scheduled for next year.
The negotiation saw delegations submitting new proposals and focusing on concrete wording for specific provisions of the future agreement. They addressed the streamlining and speeding up of administrative procedures, the types of mechanisms for contact/focal points, and arrangements to enhance domestic coordination and cross-border cooperation. They also discussed temporary entry for investment persons and the facilitation of movement of businesspersons for investment purposes, the issues of transfer and subrogation as well as cross-cutting matters, including responsible business conduct and measures against corruption.
The coordinator, Ambassador-designate of Chile Mathias Francke, updated participants on the productive open-ended intersessional meeting held on 29 October where delegations revised the wording suggested to reflect common ground on various provisions of Section II (Transparency of Investment Measures) and Section III (Streamlining and Speeding Up Administrative Procedures and Requirements) and to streamline the consolidated text discussed so far.
With another round of formal negotiations on 7-8 December and an informal open-ended inter-sessional meeting scheduled for 23 and 27 November, the coordinator said the process will keep moving ahead so that “collectively we can show concrete results,” with a revised and streamlined consolidated text being circulated in late December. The coordinator encouraged delegations to continue working bilaterally or in groups in order to advance the negotiations and facilitate convergence.
Least developed countries hit hard by trade downturn triggered by COVID-19 pandemic[2]
Least developed countries (LDCs) have been hit hard by the downturn in global trade triggered by the COVID-19 pandemic, with LDC merchandise exports declining by 16 per cent during the first half of 2020, WTO members were told at a meeting of the WTO’s Sub-Committee on LDCs held on 11 November.
The WTO Secretariat reported that the decline in the value of LDC merchandise exports was steeper than the 13 per cent average decline in global exports registered in the first six months of the year. The LDC services sector also took a hit, with preliminary estimates suggesting a drop of close to 40 per cent in the first six months of 2020. The LDCs also had a subdued trade performance in 2019, with their share in world exports (goods and services combined) remaining static at around 0.96 per cent.
The impact of the pandemic on LDC trade was a special focus of the Secretariat’s latest annual report on market access for products and services of export interest to LDCs:
https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/COMTD/LDCW68.pdf&Open=True
DDG Wolff calls for new initiatives to cut tariffs on medical supplies and equipment[3]
Speaking at a 12 November virtual World Economic Forum meeting looking at the impact of the COVID-19 pandemic on the healthcare industry, Deputy Director-General Alan Wolff said the WTO has provided members with information that has helped them make informed decisions and pull back from imposing trade-restrictive measures. Nevertheless, more is needed, including new initiatives to eliminate tariffs on pharmaceuticals, medical supplies and medical equipment and to create a global code of conduct on the use of export controls. His remarks are below.
Comments from WTO Deputy Director General Alan Wolff:
The WTO has provided since early in the pandemic the information needed for national governments to make more informed decisions. This was a factor in the pull-back from the imposition of export controls on food, for example.
More is needed:
- Tariffs should on pharmaceuticals and medical supplies should be removed;
- Medical equipment should be included in an immediate update of the Information Technology Agreement which provides for duty-free treatment;
- Export controls should be subject to an agreed code of conduct;
- The WTO Secretariat needs to be given the resources and mandate to make its monitoring far more complete;
- Cross-border telemedicine/e-health should be facilitated during the pandemic.
On innovation and trade
- It is imperative to maintain the free exchange across borders of ideas, inputs, and financing to help generate new ideas and technologies.
Thailand joins negotiations on services domestic regulation[4]
Thailand is the first member state of the Association of Southeast Asian Nations (ASEAN) to join the negotiations as the 63rd participant at a meeting on 11 November at the WTO. Domestic regulation disciplines will help facilitate trade in services and increase transparency and predictability, Thailand emphasized, noting that services account for 60 per cent of its gross domestic product. According to the latest World Bank annual ratings, Thailand is one of the leading reformers of services regulations and is ranked 21st in the Bank’s latest ease of doing business.
Participants[5] continued discussing the draft Reference Paper containing the proposed disciplines and reiterated their aim to finalize these negotiations by the 12th WTO Ministerial Conference scheduled to take place next year. The disciplines apply to licensing and qualification requirements as well as procedures and technical standards for trade in services. The objective is to create good regularity practices that help mitigate any unintended trade-restrictive effects of procedures for authorizing the supply of services.
The Chair, Jaime Coghi Arias of Costa Rica, stressed that “stabilising the text will send a positive signal to the WTO membership and beyond, and will allow the negotiations to focus on the next procedural steps and on how to best engage Ministers for the conclusion of these negotiations”.
The disciplines are designed to be compatible with WTO members’ diverse regulatory systems and approaches. They provide for built-in flexibilities to help governments implement the measures domestically.
Participating members are submitting draft schedules outlining how the disciplines will be incorporated in their respective commitments under the General Agreement on Trade in Services (GATS). A total of 30 draft schedules (representing 57 WTO members) have been submitted so far. Thailand and Kazakhstan announced their intention to submit their respective draft schedules soon.
The Chair highlighted the “good progress” made at the meeting, with most of the outstanding drafting issues resolved. He called on delegations to “work together in the coming days and weeks to resolve the few remaining issues, with a view to presenting a close-to-final Reference Paper before the end of 2020.”
International Investment Agreements Reform Accelerator[6]
UNCTAD’s just-published IIA Reform Accelerator aims to speed up the modernization of the existing stock of 2,500 old-generation international investment agreements (hereinafter – IIA) in force today. The importance of reforming old-generation treaties is particularly evident in times of crisis, such as the COVID-19 pandemic the world is facing today.
The accelerator responds to the need for change of substantive aspects of the IIA regime by focusing on a selection of reform-oriented formulations for eight key IIA clauses, including fair and equitable treatment, and indirect expropriation provisions. It identifies ready-to-use model language, accompanied by recent IIA and model bilateral investment treaty (BIT) examples.
Building on UNCTAD’s Investment Policy Framework, accelerator provides a tool for coordination, focused discussion and consensus-building on joint reform actions between multiple countries. It can be used for joint interpretation, amendment or replacement of old treaty provisions.
[1] https://www.wto.org/english/news_e/news20_e/infac_09nov20_e.htm
[2] https://www.wto.org/english/news_e/news20_e/devel_11nov20_e.htm
[3] https://www.wto.org/english/news_e/news20_e/ddgaw_12nov20_e.htm
[4] https://www.wto.org/english/news_e/news20_e/jssdr_11nov20_e.htm
[5] Albania; Argentina; Australia; Austria; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic; Denmark; El Salvador; Estonia; European Union; Finland; France; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Korea, Republic of; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova, Republic of; Montenegro; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Poland; Portugal; Romania; Russian Federation; Saudi Arabia, Kingdom of; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Thailand; Turkey; Ukraine; United Kingdom; and Uruguay
[6] UNCTAD (2020), https://unctad.org/webflyer/international-investment-agreements-reform-accelerator